If a Stock's Dividend Is Expected to Grow at a Constant

question 47

Multiple Choice

If a stock's dividend is expected to grow at a constant rate of 5% a year,which of the following statements is CORRECT? The stock is in equilibrium.

• A)The expected return on the stock is 5% a year.
• B)The stock's dividend yield is 5%.
• C)The price of the stock is expected to decline in the future.
• D)The stock's required return must be equal to or less than 5%.
• E)The stock's price one year from now is expected to be 5% above the current price.

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Definitions:

Role Conflict

A situation where an individual faces incompatible demands or expectations from different social roles they occupy.

Status Set

The collection of social statuses that an individual occupies at a given time, reflecting their roles in society across different contexts.

Social Space

An abstract concept referring to the areas or environments where social interactions occur, influenced by various social structures and relationships.

Map

A visual representation of an area showing physical features, topography, or political boundaries.